It will also save you a lot of time and headaches so that you can concentrate your time on making your business a success. John A. Tracy, CPA, is professor of accounting, emeritus, at the University of Colorado in Boulder. Earlier in his career, he was a staff accountant with Ernst & Young. Successful businesses need financial information to control costs, manage cash flow, and generate a profit. Without reliable data, you may not be able to make the best decisions for your business. A bookkeeping system provides the information you need to manage your operations. Lita Epstein, who earned her MBA from Emory University’s Goizueta Business School, enjoys helping people develop good financial, investing and tax-planning skills.

Current liability:An amount owed by the business that is due within the next 12 months, including scary stuff such as credit cards. Every business has three key financial parts that you, as the bookkeeper, must keep in balance: assets, liabilities, and equity. Following are the descriptions of these three terms:It is also a legal requirement that you stay on top of your company’s accounting records and keep historical records for at least 6 years. Reconciliations: Once all transactions are posted, you need to reconcile each of the bank accounts including credit cards. Jane Kelly, a Chartered Management Accountant and author of Bookkeeping & Accounting All-In-One For Dummies, teaches bookkeeping courses for small businesses. Paul Barrow is a Chartered Accountant with more than 20 years' consulting, training and writing experience. Lita Epstein designs and teaches online investing, finance and tax courses.

While getting her MBA, Lita worked as a teaching assistant for the financial accounting department and ran the accounting lab. After completing her MBA, she managed finances for a small nonprofit organization and for the facilities management section of a large medical clinic. The balance sheet is a snapshot of your business’s financial health as of a particular date. The balance sheet should show that your company’s assets are equal to the value of your liabilities and your equity. It uses the formula Assets = Liabilities + Equity.S or C corporation: Corporations are separate legal entities, and their owners are protected from claims filed against the corporation’s activities. However, the obligations that come with incorporating are tremendous, and a corporation needs significant resources to pay for the required legal and accounting services. There are two types of corporate structures: